Genting Singapore (GENS SP) 1Q25 Results: Soft Start, BUY Maintained | UOB Kay Hian Analysis

UOB Kay Hian

Thursday, 15 May 2025

Genting Singapore: Buy Rating Maintained Despite Soft 1Q25 Start

Genting Singapore (GENS SP) faces headwinds but remains a ‘Buy’ due to bargain valuations and dividend yield.

Company Overview

• Genting Singapore (GENS SP) is a Singapore-based regional leisure, hospitality, and integrated resorts development specialist. [[1]]
• GICS Sector: Consumer Discretionary [[1]]
• Bloomberg ticker: GENS SP [[1]]
• Share Price: S\$0.735 [[1]]
• Target Price: S\$0.90 [[1]]
• Upside: +22.4% [[1]]

Stock Data

• Shares issued (m): 12,082.9 [[1]]
• Market cap (S\$m): 8,880.9 [[1]]
• Market cap (US\$m): 6,837.8 [[1]]
• 3-mth avg daily t’over (US\$m): 19.1 [[1]]
• 52-week high/low S\$0.935/S\$0.66 [[1]]

Price Performance (%)

• 1mth: 5.8 [[1]]
• 3mth: (0.7) [[1]]
• 6mth: (5.8) [[1]]
• 1yr: (20.5) [[1]]
• YTD: (3.9) [[1]]

Major Shareholders (%)

• Genting Bhd: 52.6 [[1]]
• Vanguard Group: 1.9 [[1]]
• BlackRock: 1.8 [[1]]

• FY25 NAV/Share (S\$): 0.70 [[1]]
• FY25 Net Cash/Share (S\$): 0.27 [[1]]

1Q25 Results: A Detailed Look

Genting Singapore’s (GENS) 1Q25 results reflect a softening operational matrix as tourism spending and foreign visitations slow. [[1]] Several headwinds, including weakening consumer sentiment from global trade uncertainties and intensifying competition from Marina Bay Sands (MBS), are emerging. [[1]] This prompts a revision of earnings forecasts and valuation yardstick lower. [[1]]

Key Financials (S\$m)

1Q25 vs. Previous Periods

• Revenue: 626.2 (+2.3% qoq, -20.2% yoy) [[1]]
• Singapore: 626.0 (+2.3% qoq, -20.2% yoy) [[1]]
• Gaming: 437.5 (+5.3% qoq, -24.0% yoy) [[1]]
• Non-gaming: 188.5 (-4.1% qoq, -9.5% yoy) [[1]]
• Core adjusted EBITDA: 235.8 (+4.6% qoq, -36.2% yoy) [[1]]
• Core Net profit: 150.3 (+4.5% qoq, -39.7% yoy) [[1]]
• Adjusted EBITDA Margin: 37.7% (-9.5 ppt yoy) [[1]]

Detailed Analysis of 1Q25 Results

• Below Expectations: Resort World Sentosa (RWS) reported revenue (+2% qoq, -20% yoy) and EBITDA (+5% qoq; -36% yoy). [[2]] The yoy decline is significant due to 1Q24’s high base, which included strong visitations from Taylor Swift’s Eras Tour concerts. [[2]] 1Q25 EBITDA represented approximately 20% and 23% of UOB Kay Hian’s and consensus full-year forecasts, respectively. [[2]]
• Gaming Statistics: Gaming revenue in 1Q25 surged c.5% qoq, reflecting the festive period and school holidays. [[2]] This growth was driven by higher VIP rolling chip volume (+26% qoq) despite a lower VIP win percentage of 3.39% (4Q24: 3.5%). [[2]] Mass market gross gaming revenue (GGR) also improved 5% qoq. [[3]]
• Year-on-Year Decline: Gaming revenue decreased by 20% yoy, mainly due to lower VIP volume (-19% yoy), lower VIP win percentage (1Q25: 3.39% vs. 1Q24: 4.62%), and fewer available rooms (c.1189 rooms vs. 1Q24: c.1530 rooms). [[3]]

Key Financials (S\$m)

Non-Gaming Segment Performance

• RWS’ non-gaming revenue declined 10% yoy and 4% qoq due to softer patronage and fewer available rooms (c.1189 vs. 1Q24: c.1530) following the closure of Hard Rock Hotel for renovations. [[2]]
• Hotel occupancy rate decreased to 72% (4Q24: 78%), offsetting the improvement in average room rate to S\$512 (4Q24: S\$500). [[2]]

Stock Impact Analysis

Singapore Tourist Arrivals

• Singapore’s tourist arrivals in 1Q25 recovered to approximately 92% of pre-pandemic levels (4Q24: 82%), driven by mutual visa exemption agreements and festivities. [[2]]
• 1Q25 saw 4.31 million visitors (+2% yoy). [[2]] Slower visitations in March normalized from a high base in 1Q24 due to Taylor Swift’s Eras Tour concerts. [[2]]
• Upcoming entertainment events like Lady Gaga’s concerts, Anime Festival Asia, Glow Festival 2025, and Formula 1 are expected to boost foreign patronage. [[2]]

Macroeconomic Headwinds and Competition

• Consumer sentiment and average spending in RWS may be negatively impacted by economic uncertainty from US tariff policies affecting regional countries like China and Indonesia. [[3]]
• Marina Bay Sands’ (MBS) strategic location and recent renovation of approximately 1850 hotel rooms pose stiff competition for RWS. [[3]] MBS continues to show strong growth in mass gaming segments, exceeding pre-pandemic levels. [[3]]

RWS 1.5 Launch as a Catalyst

• The full launch of RWS 1.5, with multiple crowd-drawing attractions, is an important re-rating catalyst. [[3]]
• Themed zone – Illumination’s Minion Land in Universal Studios Singapore opened in mid-Feb. [[3]]
• Construction of the Singapore Oceanarium and a super luxury all-suite hotel is progressing well, with openings expected in 3Q25. [[3]]
• A 21,243 sqm Waterfront development will eventually add 700 hotel rooms. [[3]]

CEO Resignation Impact

• The retirement of Mr. Tan Hee Teck as GENS’ CEO has a limited impact, as Tan Sri Lim Kok Thay (current executive chairman) will assume the role of acting CEO. Ms. Lee Shi Ruh will be appointed as the new CEO of RWS. [[3]]

Balance Sheet and Capital Management

• Healthy balance sheet and significant cash reserves (S\$3.58b, or 29.6 S cents/share as of 4Q24) offer optimism for better capital and yield management. [[3]]
• Potential participation in the bid for a Thailand integrated resort is possible, but higher dividend payouts could also be considered. [[3]]

Earnings Revision

• 2025-26 earnings forecasts are revised downwards to factor in softer average spending and business volume due to uncertainties from US trade policies and competition from MBS. [[4]]

Valuation and Recommendation

• Maintain BUY rating with a lower target price of S\$0.90 (from S\$1.12). [[4]]
• Adjusted 2025F EV/EBITDA multiple to 8x (-1SD below mean) from 9x (-0.5SD below mean) to account for a lower risk premium for the sector. [[4]]
• Genting Singapore offers a 5.4% dividend yield, backed by S\$0.30 net cash/share (41% of market cap). [[4]]

Timeline Development for RWS 2.0 Non-Gaming Attractions

• Van Gogh: The Immersive Experience in new theater (Mar-Oct 2023) [[4]]
• Hotel Ora (Renovated Festive Hotel) (May 2023) [[4]]
• Gourmet Park at The Bull Ring (June 2024) [[4]]
• Enhancement of convention center (End 2024) [[4]]
• Minion park (replace Madagascar zone) (Feb 2025) [[4]]
• Singapore Oceanarium (July 2025) [[4]]
• Super luxury all-suite hotel (3Q 2025) [[4]]
• Waterfront development (2027) [[4]]

Key Assumptions

Earnings Trend of GENS and MBS

Profit & Loss Statement

Balance Sheet

Cash Flow Statement

Key Metrics